Average annual prices of Toronto residential properties remain stable due to sustained gains in the condo segment, and the further tightening of mortgage rules could add a temporary boost this autumn, observers argued.

The decision by the Office of the Superintendent of Financial Institutions to impose more stringent stress tests could lead to a scramble as the rules, which take effect on January, might slash a family’s purchasing power by as much as 21%.

“The recent changes announced by OSFI might actually result in a short-term rush as those that are impacted by these changes rush to buy,” Realosophy.com president John Pasalis told BNN. “What happens after [the Jan. 1 deadline] is anyone’s guess right now, but I expect the spring market in 2018 to be cooler that it has been in recent years.”

This is despite the overall market being “more balanced” than it was a year ago, Pasalis said. The executive noted the growing evidence of “stark divergences” in the market between condos and freeholds.

“Average prices are up 2% over last year, but this is due to the condo market which saw prices rise 17%,” Pasalis explained. “Freehold prices were flat over last year.”

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